Bipartisan Legislation Enables State to Curtail Individual Health Insurance Rate Hikes, Will Make Healthcare More Affordable for Marylanders

​ANNAPOLIS, MD - Governor Larry Hogan today was joined by Senate President Thomas V. “Mike” Miller and House Speaker Michael Busch to announce that the federal Centers for Medicare and Medicaid Services (CMS) has approved Maryland’s 1332 State Innovation Waiver to create a state reinsurance program to help stabilize Maryland’s individual health insurance market and prevent previously predicted massive rate hikes. The governor and presiding officers were joined by Maryland Department of Health Secretary Robert Neall, Maryland Insurance Commissioner Al Redmer, Maryland Health Benefit Exchange Executive Director Michele Eberle, as well as leading legislators and healthcare advocates.

"With our innovative new reinsurance program, the health insurance market in Maryland will finally have the chance to be competitive and dynamic," said Governor Hogan. "These cost reductions and this competition will lead to more insurers entering the market and make healthcare more affordable for all Marylanders."

"CMS is committed to giving states the flexibility they need to shield their citizens from Obamacare's skyrocketing premiums," said CMS Administrator Seema Verma. "The reinsurance waiver we approved today will provide immediate help to Marylanders being priced out of coverage, and I appreciate Governor Hogan’s leadership in making Maryland the seventh state to gain approval for such a waiver."

Facing predicted health insurance rate increases of up to 50 percent and inaction by leaders in Washington, D.C., the Hogan administration worked closely with legislative leadership to develop landmark legislation enabling the state to take this action. Ultimately, the Maryland General Assembly passed House Bill 1795 – Establishment of a State Reinsurance Program. Governor Hogan, President Miller, and Speaker Busch signed this emergency legislation on April 5, 2018, allowing it to take effect immediately.

The legislation directed the Maryland Health Benefit Exchange to submit a State Innovation Waiver under Section 1332 of the Affordable Care Act (ACA) to the U.S. Secretaries of Health and Human Services and the Treasury to establish a state reinsurance program. The legislation combined with this waiver will set up a reinsurance pool to provide funding for catastrophic claims for policyholders in the individual market.

“The difference between our federal government and our state government is on display today. In Washington, they played games with healthcare and jeopardized insurance coverage for a quarter of a million Marylanders. In Annapolis, we came together to develop a responsible solution which protects Marylanders and stabilizes our health insurance marketplace,” said President Miller. “We have to do more to ensure every Marylander has access to quality, affordable healthcare, but today’s announcement is a step in the right direction.”

“We have worked to ensure access to affordable, quality healthcare for all Marylanders for decades,” said Speaker Busch. “Despite the federal government’s attempt to force unsustainable cost increases in Maryland’s individual market, this 1332 waiver will ensure that 250,000 Marylanders continue to have health insurance in the coming years. We won’t stop working until the remaining 6% of uninsured Marylanders have quality healthcare.”

With the waiver approval, Maryland will have the largest reinsurance program in the nation, valued at $462 million. The program will become active this year and run through 2020, with the potential to be extended through 2023. The state will support the reinsurance program by leveraging funds that had previously been assessed by the federal government on insurance carriers, which is expected to provide approximately $365 million.

“Team Maryland is committed to making sure that families have access to quality, affordable health care,” said U.S. Senators Ben Cardin and Chris Van Hollen. “This waiver, which the Congressional delegation strongly urged the Administration to grant, will allow the state’s proposal to establish a reinsurance program and lower premium costs for people across Maryland to move forward. At a time when the Affordable Care Act is constantly under attack, we are fighting for the best health care options for our state.”

Following this federal approval, the Maryland Health Benefit Exchange Board will finalize the reinsurance program structure. Then, the Maryland Insurance Administration will request updated proposals for rates from the two carriers who serve the individual market in Maryland: CareFirst BlueCross BlueShield and Kaiser Permanente. Updated proposals will be presented at a public hearing on September 17. Rate filings for 2019 are expected to be reduced by an estimated 30 percent from what they would have been without the waiver, and the program is estimated to grow enrollment on Maryland’s individual market by nearly six percent for 2019.

“Today’s announcement, the approval of Maryland’s 1332 State Innovation Waiver, is a result of the tireless, hard work by the Hogan Administration, the Maryland Department of Health, the Maryland Insurance Administration, and the Maryland Health Benefit Exchange, who worked closely with the General Assembly to see this waiver come to fruition,” said Secretary Neall. “Maryland continues to lead the nation in innovative health care delivery and today, thanks to our partners at the Centers for Medicare and Medicaid Services, we are ensuring that Maryland remains an attractive, competitive market for all Marylanders seeking health insurance.”

"Today's announcement signals a step in the right direction for Marylanders who buy their health insurance in the individual market. In the face of Congressional inaction and impending premium rate increase requests for the 2019 plan year, Governor Hogan and the General Assembly leadership championed this critical initiative in pursuit of premium relief, " said Insurance Commissioner Redmer. "After the Maryland Health Benefit Exchange Board approves the program structure, carriers will refile their 2019 rate requests for the individual market to reflect this reinsurance program, which we expect to reduce 2019 carrier rate increase requests significantly."

“Although the number of uninsured residents has dropped by half in recent years, many Marylanders still lack health insurance. The approval of this waiver will allow more uninsured Marylanders to get covered. We greatly appreciate the work of Governor Hogan and the General Assembly in advancing the progress Maryland has made,” said Michele Eberle, executive director of the Maryland Health Benefit Exchange, which administers the state-based marketplace Maryland Health Connection.

Maryland continues to make gains with populations that have lacked health insurance, including increases in enrollment among young adults, minorities, and rural Marylanders.

“Here in Maryland, we have consistently proven that we can find common sense, bipartisan solutions to the serious problems that face us,” concluded Governor Hogan. “These actions should serve as an example to the rest of the nation of what can be accomplished when both sides of the aisle and all levels of government join together to develop innovative solutions. We are making real progress toward addressing these health care challenges. We are making healthcare in Maryland more accessible and more affordable.”